In today’s unpredictable economic environment, global businesses are facing a growing threat: fraud. As the number of businesses entering the marketplace continues to rise, so too does the sophistication of fraudulent activity, which has only been fueled by the rise of AI, digital deception, and data harvested from the open, deep and dark web.

Fraud isn’t just a risk; it’s a reality that companies are far too often trying to react to as opposed to being proactive. And it’s taking many forms:

• First-party fraud: involves individuals or businesses intentionally deceiving lenders by misrepresenting their financial standing or intentions. Common tactics include first payment default, deliberate non-payment, commercial bust-outs (where a business builds credit, maxes out limits and vanishes), use of shelf or shell companies to obscure ownership, and falsifying business credentials to gain access to credit.
• Third-party fraud: involves external actors and includes schemes such as business identity theft (where fraudsters impersonate legitimate companies), creation of synthetic entities (fabricated businesses with fake credentials), account takeovers (unauthorized access and control of business accounts), and business email compromise (manipulating or spoofing corporate email communications to defend organizations).

To stay resilient and competitive, businesses should follow a practical and comprehensive framework: the Six C’s of Fraud Prevention. These principles are designed to help businesses not only detect and prevent fraud but also foster a culture of vigilance and adaptability.

1. Culture

Protecting your business from fraud doesn’t begin with technology – it starts with your company’s culture. When you foster an environment built on integrity, transparency and accountability, you’re laying the groundwork for strong fraud prevention. A culture that actively stands against fraud empowers your team to make smarter, safer decisions.

In the world of business credit, it’s often up to the issuer of credit, goods or services to decide how much risk they are willing to take. For example, from past interactions, one privately held company chose to eliminate all checks and balances in their credit application process. The CEO’s philosophy was “get orders in, get orders out” – choosing speed over scrutiny. Unfortunately, the company was targeted by fraudsters, and the lack of fraud defenses caused the company to have estimated fraud losses of over $3 million per year.

When speed is prioritized over security, businesses can struggle. Without proper investment or support to mitigate against fraud, team members are left to react to problems instead of preventing them. The result? Increased risk, potential lost revenue and a vulnerable business.

2. Customers

Fraud prevention isn’t just about catching bad actors – it’s about truly understanding who you’re doing business with. Ask yourself: Who are my customers? Why are they choosing my business? These questions can be key to spotting risks before they become problems – because sometimes, the bad actors are the customers themselves, deliberately misrepresenting their intentions to exploit trust and credit.

It’s not just external customers you need to think about – your internal teams and business partners play a big role too. Are they aligned with your goals for protecting the business?

One powerful strategy is to think like a fraudster. Conduct regular risk assessments and walk through your own processes as if you were trying to exploit them. You might be surprised at what you find.

In my experience working with various business services divisions, I would often ask, “How many of you have ever tried forming a business in your own state?” Out of hundreds of professionals, only a handful had. This can make one wonder if they are fully understanding of the process and if this can make it easier for fraud to sneak in. The lesson applies everywhere: knowing who’s coming to your business – and why – is essential, no matter what industry you’re in.

3. Controls

Controls are only as good as the data behind them. Use high-quality, reliable data to inform your fraud prevention strategy. Monitor the full data lifecycle—from onboarding to ongoing transactions—and look for anomalies. A layered approach to controls, backed by digital intelligence, is key to staying ahead.  Ask yourself: What’s working? What’s not? What’s holding us back?

4. Classifications

Don’t lump all fraud into one bucket. Classify it by typology—be specific. This helps you identify trends, assess risk more accurately, and measure the effectiveness of your mitigation strategies.

Being able to triangulate and identify your specific risks is critical. I’ve spoken with companies, even global technology providers, where they’ve built what they thought were appropriate and detailed classifications for consumer fraud. However, when identifying risk within their business portfolio, almost everything was labeled as “fraud.”

This type of approach is troublesome and results in “a garbage in, garbage out” approach that can severely harm business. If you do not have the appropriate classifications of fraud within your portfolio, how can you mitigate your risks? A catch all label might seem like the easiest approach out of the gate, but it can cost a ton of more resources in the long run.

5. Creativity

Fraudsters are constantly evolving—and so should you. Be creative. Brainstorm new approaches, invest in innovation, and allocate budget to stay ahead of emerging threats. Use your imagination and industry knowledge to anticipate what’s next. There is no set playbook that can answer all of your problems. Get involved and get the best and brightest minds from the trenches involved.

6. Communication

Fraud prevention is a team sport. Share your experiences with other businesses and data-sharing networks. Champion the “why” behind your efforts and position yourself as a partner, not a blocker. Transparency and collaboration can help the global business ecosystem become more resilient.

Resilience isn’t about avoiding risk—it’s about being prepared for it. By embracing the six C’s and leveraging tools like digital verification, fraud data science and consortium networks, businesses can build a strong defense against fraud.

Remember: “Never let an event go to waste—whether good or bad.” Every experience is an opportunity to learn, adapt and grow stronger.

The guidance in this article is based on industry best practices and should not be taken as legal or financial advice.